Scranton v. Mechanics' Trading Co.

Park, J. The question in this case is, does the mere breach of warranty of personal property in an executed contract of sale, give the vendee the right to rescind the contract and return the property, or tender its return, when no agreement to that effect was made in the contract of sale ? The case finds that the defendants accepted and took possession of the property under the contract, and gave their check to the plaintiff for the contract price of the articles after they had been examined to their full satisfaction. It is difficult to conceive how the contract of sale could have been more thoroughly executed, or the acceptance of the goods more complete than appears in the case. The title to the property therefore passed to the defendants, and the question is, had they the right to avoid the contract solely on the ground that the warranty was broken. The authorities upon this subject are not uniform, but we Dfirk the weight of the modern decisions, as well as the [133] analogies of the law, are decidedly against such a right. Such is the settled doctrine of the state of New York, as appears by the cases of Voorhees v. East, 2 Hill, 288, and Cary v. Gruman, 4 Hill, 626. So also it has been decided in Pennsylvania in the case of Kase v. John, 10 Watts, 107; in Kentucky, in the case of Lightburn v. Cooper, 1 Dana, 273; and in the Supreme Court of the United States, in the case of Thornton v. Wynn, 12 Wheat., 193. Such also is the modern English rule on the subject, as appears by the cases of Street v. Blay, 2 Barn. & Adol., 456, Dawson v. Colles, 10 Com. Bench, 288, Gompertz v. Denton, 1 Cromp. & Mees., 209, Parsons v. Sexton, 4 Com. Bench, 899, and Ollivant v. Bayley, 5 Q. Bench, 288. See also Chitty on Contracts, 400, and Benjamin on Sales, 673 and 680. And such also we understand to be the law of this state, although the question has not been directly decided by this court. Judge Swift, in the first volume of his Digest on the 383d page, in speaking of the warranty of a horse, says.:— “ Where there is no agreement to return the horse if he proves unsound, yet the buyer may return him if he pleases, and it is optional with the vendor to accept him or not. If he accepts him he will be liable to refund the price of the horse. It is true an opinion has been intimated that in such case the buyer may return the horse and bring an action for the money; but this must be understood when the vendor consents to take him back; and no case has gone so far as to hold that the purchaser may tender the horse, and if refused bring an action for the money paid for him. In such case the action must be brought on the warranty.” If the vendee has the right to rescind the contract under such circumstances, he could recover back the sum paid for the articles warranted, as well as successfully defend himself in an action brought to recover the price. In the case of Kellogg v. Denslow, 14 Conn., 411, Judge Sherman says: “ There are three conditions in which the purchaser of a personal chattel may have remedy against the seller. 1. Where there is a warranty. 2. Where there is fraud on the part of the seller. 3. Where the sale is on. condition, express or implied, that the "purchaser in a [134] certain event may disaffirm the sale and return the article. * '* The condition that the vendee may return the property in a certain event is implied in the case of executory contracts; as where an article is ordered from a manufacturer who contracts that it shall be fit for a certain purpose, and the article sent as such is never completely accepted by the party ordering it.” The judge seems to make a distinction between executory and executed contracts in this regard. But the defendants contend that the implication that the property may be returned exists in all cases of warranty,— in those where the contract of sale is executed, so that the title to the property passes in the first instance to the vendee, as well as in those that are executory. Again the judge says: — “There has been some diversity of opinion among eminent jurists whether a vendee, to whom an absolute sale has been made with warranty, upon discovering defects in the property could return it to the vendor and rescind the contract, when there was no fraud in the transaction.” And after citing some English cases that support the affirmative of the proposition, he continues as follows: “ But in 1831 those opinions were considered by the court of King’s Bench and expressly disapproved. Street v. Blay, 2 Barn. & Adol., 456. They unanimously held that if the sale Avas unconditional and Avithout fraud the vendee could not rescind the contract and return the property without the concurring assent of the vendor. Thus the law is settled upon this point in that country.” It is manifest from this language that the opinion of the judge is in harmony with the cases of Street v. Blay and Thornton v. Wynn, which latter case he also cites Avith approbation. Chief Justice Himnan, in the case of Merriman v. Chapman, 32 Conn., 146, says: “Where there is an executory contract for the sale of goods warranted to be of a particular quality or description, they must conform to the warranty or the vendee is not bound to receive or accept them.” Here again the same distinction seems to be made which is expressly made in-the cases cited from the modern English law, and the decisions of our sister states, that if the contract of [135] sale is executory there is an implied agreement that the property may be returned if it does not conform to the sample which is the basis of the contract, or the order made upon the manufacturer or seller of the goods. But if the sale is executed, and free from fraud, — if the property is accepted under the contract, which was made in good faith, no such implication exists, and the vendee cannot rescind the contract without an express agreement to that effect in the contract of sale. There must be an agreement express or implied, in such cases, that the property may be returned if the goods do not conform to the warranty, in order to confer upon the vendee the right to return them. The distinction between an executory and executed contract of sale in this respect is manifest. In the one case the property is accepted under the contract, and in the other it is not. In the case under consideration the defendants had an ample opportunity to inspect the goods and satisfy themselves whether they conformed to the warranty. They became satisfied on the subject after examining them to their full satisfaction, and they accepted and received them under the contract". Where goods are bought by sample or ordered from a manufacturer, no such opportunity for inspection exists before the property is received, and when received the vendee should have a reasonable opportunity for inspection and examination of it, before he should be required to accept it under the contract. The rule we have adopted is far more consonant to reason and justice than that claimed by the defendants. The rule of damages in cases merely of warranty broken is the difference in value between the goods as warranted and the goods in their actual condition. If the vendee has bought the property at less than its value, if equal to the warranty, he is entitled to the benefit of his contract, and the damages give him the benefit. If he has paid more than the warranted property would be worth, the vendor is equally entitled to the benefit of his contract, if made in good faith. But the claim of the defendants would give the vendee the benefit of a con [136] tract when favorable to himself, and relieve him from its hardship when beneficial to the vendor. The seller of property is guilty of no wrong in warranting goods that he has reason to believe, and does believe, are equal to the warranty. The buyer knows that the seller may be honestly mistaken as to the quality or condition of the property, and he obtains the warranty as security against loss in these respects. All that he can require of the seller is good faith in the transaction, and if he desires the privilege of returning the property in case the warranty should he found broken, it is an easy matter for him to make provision to that effect in the contract of sale. A new trial is not advised. In this opinion the other judges concurred.